Creativity might be valued in many aspects of business: marketing, research and development—even the legal department. But there’s one function where getting creative is very risky business: accounting. Although accounting fraud might not occupy as much space in the headlines as it did back when Enron and WorldCom were caught cooking the books, the federal government hasn’t stopped looking for more potential cases to prosecute. In fact, news outlets are reporting that the U.S. Securities and Exchange Commission, led by Mary Jo White, is refocusing its attention on this brand of fraud.
Given the potential severe penalties (and reputational damage) that come with accounting fraud allegations, companies should ensure that they are keeping up with all new developments in this space. Th new focus on using analytics both inside and outside companies to bust fraudsters and the SEC’s growing focus on holding individuals within the company accountable for accounting fraud are among the factors changing the overall landscape.